First Time Buyer Stuck In House Deal

Apache14

Hello Everyone,

This is my first post on here and really need some advice on what my options are.

Background
Me and my fiance found an amazing house that fitted our needs perfectly, we also have a mortgage offer that pays the stamp duty for us (saving £1600). We put the offer in and was accepted, mortgage was "set up" and solicitors started doing their thing.

A day after we where contacted by the sellers estate agents pushing for us to get our solicitors moving faster and that me and the other half sing all documents. Giving us the impression that the sellers had found a house to complete the chain. At this point we did ask the question about weather the sellers had found a place, the response was "They are viewing houses this week that look promising, but the vendors will consider moving into rented" along with this we also advised that our mortgage offer expires at the end of September 2014 and they said that will not be a problem.

So we pushed forward with the solicitors as normal, payed the normal fees ect, and we got to the point where we are ready to get the completion date.

Current Situation
That was all 13 weeks ago, and we have not moved foreword. Due to the estate agents not being reliable (forgetting information we stated about the September deadline multiple times) we requested the direct email address of the vendor. We sent a short email to check up on the exchange as they informed us that they had found a house. The response we got back contained the following points :-

• They are NOT willing to move into rented
• They do not think that the September deadline would be met
• They have not got an accepted offer on the house
• This house also has a chain

All this puts me in a very bad situation, I have invested money in the legal fees (that my solicitors will refund ONLY IF the seller backs out) Without the £1600 savings on the stamp duty things get tight financially for me.

We also now know that the seller works at the solicitors they are using.

Sorry for a lot of information but here are my questions

• Do i have any rights as a buyer who has invested money into this house under false information ?
• As the seller works for the soliciters they are using what information will she have on the transaction (over what a normal seller has) ?
• Have i done anything wrong (that i can avoid next time) ?

Thanks in advance for any feedback

pinkteapot

I'm afraid you have no rights to claim for any of your costs. Until exchange of contracts, there is no guarantee of a purchase going ahead.

For next time - don't instruct your solicitor or apply for your mortgage until the chain is complete (from a FTB at the bottom to something with no onward chain at the top). There is absolutely no point. Of course the EA will put pressure on you to start your process, but don't. Tell them you're absolutely committed to the house, you're not viewing others, but you're not willing to spend money until there's a complete chain. This puts pressure back on your vendor to sort themselves out.

We were in that situation for two months until someone a couple of rungs above us decided to give up looking and agreed to go into rented. As soon as they said that, our whole chain started doing all their legal stuff. I think our buyer (a FTB) had applied for their mortgage earlier because their surveyor had been round, but we refused to apply for our mortgage until the chain was in place.

The EA didn't say the vendors WOULD go into rented - they said they'd consider it. That's EA speak for "we'll try to convince them but probably not".

Apache14

Ahh ok,

I guess we where to hasty (partially to get the better mortgage before the new regulations came in on affordability) >.<

EmmyLou30

Unfortunately a buyer has no rights in England, the seller holds all the cards. We were put in a very similar situation at the tail end of last year, we were chain free, mortgage all agreed in priciple with a 6 month time scale (ages we thought!!) and EA telling us the vendors hadn't found a house yet but would move out and rent.

Needless to say they pushed us to do everything quickly just like yourselves, commit £1200 of our money to fees and surveys (we were just off on holiday so even had my parents running round doing stuff and emailing us while we were away to keep it moving), we were ready to exchange contracts after 4 weeks and were just waiting on the vendors to send us the property information form's back. Then it all ground to a halt and they refused to rent. Sat it out for 4 months before finally saying they couldn't find a house afterall and were staying put and withdrawing the house from the market.

So we were shafted to the tune of £1200, lost a house we'd set our heart on, and the vendors? Well they were sitting pretty in their house with no financial penalty. Our system is disgustingly biased.

Fast forward a couple months, we found another house in January which was already empty and chain free, £25k cheaper, much better suited to our needs and we had the keys in just under 7 weeks. Our mortgage offer had to be redone and the rate went up slightly but it wasn't too bad. So it all worked out for the best. That purchase was slightly tainted by our previous experience as we spent the whole time worrying when otherwise it would have been pretty stress free but there you go.

To cap it all we get a call from the EA asking us if we'd still like the other house as they were trying to sell it again! I resisted the urge to tell her where to shove the house as I thought we might get to sell our searches and recoup some cash but 3 months later and no sign of it hitting the market. Clearly just wanted us in our ready to go state 'back on the hook' to string us along some more.

Sorry for the long winded reply, just wanted to let you know that everything will work out in the end, don't worry, and don't get disheartened :-) Good luck.

Apache14

That gives me more hope

My main gripe with this is that the vendor was very sneeky, making me feel like they where all ready and the chain was near completion (weather they brought the house or rented) now im in the situation where if i pull out of the deal I will loose the money invested in the searches. Otherwise i hand in until they sell and I lose the £1600 intensive.

My just wish the vendor was forthcoming at the onset, hell we still would have put the offer in on the house. Just waited until we moved forward with the legal stuff until they got in a position to move

In fairness (as a first time buyer) i was surprised that there was no pre sales contract that confirmed both the seller and buyers current situation. Informing of reasonable penalties ect.

Dick_here

Similarly, we accepted an asking price offer from the first and only person to see our place and were told the chain was complete etc. A month later, the buyer backs out and it turns out the chain wasn't too good either. So much for the seller having all the rights !

Apache14

!!!!!!_here wrote: »

Similarly, we accepted an asking price offer from the first and only person to see our place and were told the chain was complete etc. A month later, the buyer backs out and it turns out the chain wasn't too good either. So much for the seller having all the rights !

Ohh i totally see that side as well, its just in my situation the seller has control over the money I have invested. But i could easy take a knock on that, pull out and leave them in a situation with no buyer.

In this instance the seller was informed of all of our information. First time buyer, mortgage runs out in September ect.

But the seller was not as forthcoming .....

But yeah why is there no pre sales contract / deposit system in the UK ?

eddddy

Hi Apache14

Just a tip to use in future. Ask your solicitor to enquire about the seller's position at the outset (i.e. whether they have found a place to buy, whether they are considering renting etc).

The seller will reply to their solicitor in writing; and their solicitor and your solicitor will pass on the info without embellishment.

The seller can still 'fib', 'exaggerate' or 'change their mind later' - but it's probably a bit more reliable than just accepting what an EA says.

EmmyLou30

Buyers can definitely get strung along too and messed about, the difference is they don't lose a great mortgage deal with incentives, or a whole load of money for searches and surveys.

We were like you and naively thought the EA telling us the vendor had found a house and even if that didn't go through they'd move out and rent was a sure thing so we proceeded. I soon learnt why the EA's get the reputation they do. Liars all of them. We were continually given assurances of 'oh they're looking at 5 houses this week and it's looking very promising, I'm sure they'll go for one of them' etc.

Next time, after learning a hard lesson this time, I wouldn't proceed with searches etc unless I had a bit more proof in writing that the vendor was in the position they said they were. Not that that is any guarantee, but it's something. Hindsight eh. Like you it wouldn't have stopped us wanting the house, but a little honesty would have saved us the money and all the stress and bitterness.

As an aside if your mortgage is with Halifax, they refund the valuation and survey fee if a sale falls through and you go on to take out another mortgage with them. So that was a nice surprise as we got £629 of our lost money back which softened the blow.

AdrianC

EmmyLou30 wrote: »

Buyers can definitely get strung along too and messed about, the difference is they don't lose a great mortgage deal with incentives, or a whole load of money for searches and surveys.

They may very well do, of course, on whatever place they're buying if the chain falls apart, because of one link - whether buyer or seller - playing silly !!!!!!s.

Anybody who says the system is "biased" is not thinking about the bigger picture, only the small bit they can see as an FTB. Sellers and buyers have exactly the same rights to walk away at any time before exchange.

EmmyLou30

Fair point AdrianC, a dodgy buyer is just as much a risk to a chain as a vendor. I'm a second time buyer but my first purchase was 5.5 weeks long and a breeze so I remained slightly naive with purchase number two. I think something needs to be put in place to protect buyers and vendors alike, stop people being so casual about it all. I've treated my purchases very seriously, only offered once I'm in a position to move instantly with a mortgage in place, fully researched the house and area etc so as not to pull out on a vendor and mess them about. Expecting the same courtesy from every house hunter and seller is perhaps a little bit of a fantasy! I've never been in a vendors position as yet but I don't look forward to it any more than buying :-)